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CONTRACT LAW (Offer (Termination of offer:An offer is valid until it is…
CONTRACT LAW
Offer
A person is said to make an offer when he indicates to another his willingness to enter into a contract on the terms which he sets out in the offer
Termination of offer:An offer is valid until it is terminated
Terminating offer:
1)Revocation 2)Rejection 3)Lapse of time
Revocation of offer
Must be communicated to the offeree but offer can be revoked anytime before the offer is accepted CASE: Byrne v Van Tienhoven
Rejection by the offeree
A counter offer is a new offer made by the offeree by modifying the original terms of the offeror's offer.
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Lapse of offer
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Where the offer has not been accepted within the prescribe time CASE: Ramsgate Victoria Hotel v Montefiore
General Rules on offer
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An offer may be made to a single definite person, a group of persons or the world at large
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An offer must be communicated to the offeree before it can be accepted. The offeree cannot accept an offer unless he knows of its existence
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Consideration
Some rules on consideration:
- Consideration must be real
- Consideration need not be adequate
- Consideration must move from promisee
- Consideration must be legal
- Consideration must not be past
General Rule: In order to be valid, a contract must be supported by consideration
Exchange (of benefits/promises)
- So every contract has 2 promisors and 2 promisees:
- Promisor – the one making the promise
- Promisee – the one receiving the benefit of the promise
- If no consideration, contract not binding
- Exception: contracts under seal (a „deed‟) – signed,
sealed & delivered.
- Nowadays red stickers from Popular shop used.
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Acceptance
Definition: Unconditional consent to offer by offeree General rules:
(a) Absolute, unconditional of terms
(b) By prescribed method eg. mail, fax etc
- If none stated, then „reasonable‟
(c) Must be communicated
Acceptance must be communicated to the offeror
Silence cannot amount to acceptance
Exceptions to communication rule:
(a) Waiver by offeror i.e. no need to send acceptance
(b) “The Postal Rule”